VD Industries capital structure consists of 43% debt and the remaining structure in equity. Four years ago, the firm issued 20 year, 10% semi-annual coupon bonds e markets. If VD has a cost of equity of 12% and pays a marginal to rate of 20%, what their WACC? 09.11% O 10.02% O 8.20 % - 11.02% O 12.12% $850 in curt
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- Currently Forever Flowers Inc, has a capital structure. consisting of 25% debt and 75% equity Forever's D debt currently has 9% yield to maturity. The risk free rate is 3% and the market risk premium is 6%. D Using the CAPM, Forever estimates that its cost of Dequity is currently 11.5% The company has. a 25% tax rate. PL AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA Da) What is Forever's current WACC? Round to two decimal places %% Db). What is the current beta on Forever's common stock? Round to two clecional places () What would Forever's beta be if the company had no debt, in its capital structure? (That is, what is Forever's unlevered beta) your answer to two decimal places. Round ▷ Forever's financial staff is considering changing it capital I went ahead with the proposed change, the yield to maturity Dstmeture to 40% debt and 60% equity. If the comparaturity on the company's bonds would rise to 10%. The proposed change will have no effect on the tax rate company's Ad) What would be the…A company has an outstanding bond issue with a 7.75% coupon, paid semiannually, a current maturity of 20 years, and it sells for $967.97. The firm's income tax rate is 40%, What should the firm's managers use as an after-tax cost of debt for cost of capital purposes? 4.85% 2.42% 8.08% 4.04 %Reingaart Systems is expected to pay a $3.4 dividend at year end (D1 = $3.4), the dividend is expected to grow at a constant rate of 5.8% a year, and the common stock currently sells for $65 a share. The before-tax cost of debt is 7.8%, and the tax rate is 29%. The target capital structure consists of 56% debt and 44% common equity. What is the company's WACC if all equity is from retained earnings? O 8.55% O 7.65% O 7.95% O 7.35% 8.25%
- Suppose that LilyMac Photography expects EBIT to be approximately $230,000 per year for the foreseeable future, and that it has 1,000 10-year, 9 percent annual coupon bonds outstanding. What would the appropriate tax rate be for use in the calculation of the debt component of LilyMac's WACC? Tax rate 37 %Umbrella Corp is expected to pay a dividend at year end of D1 = $2.50. This dividend is expected to grow at a constant rate of 5.00% per year, and the common stock is currently valued at $71.00 per share. The before-tax cost of debt is 6.75%, and the tax rate is 40%. The target capital structure consists of 40% debt and 60% common equity. What is the company's WACC? (Ch. 10) Group of answer choices 7.74% 6.73% 3.73% 6.19% 7.81%sorensen systems inc. is expected to pay a $2.50 dividend at year end (d1=$2.50), the dividend is expected to grow at a a constant rate of 5.50% a year, and the common stock currently sells for $52.50 a share. the before-tax cost of debt is 7.50%, and the tax rate is 40%. The target capital structure consists of 45% debt and 55% common equity. What is the company's WACC?
- Sorensen Systems Inc. is expected to pay a $2.50 dividend at year end (D1 = $2.50), the dividend is expected to grow at a constant rate of 5.50% a year, and the common stock currently sells for $87.50 a share. The before-tax cost of debt is 7.50%, and the tax rate is 25%. The target capital structure consists of 45% debt and 55% common equity. What is the company's WACC if all the equity used is from retained earnings? Do not round your intermediate calculations. a. 5.69% b. 7.35% c. 5.10% d. 7.13% e. 6.62%Sorensen Systems Inc. is expected to pay a $2.50 dividend at year end (D1 = $2.50), the dividend is expected to grow at a constant rate of 5.50% a year, and the common stock currently sells for $87.50 a share. The before-tax cost of debt is 7.50%, and the tax rate is 25%. The target capital structure consists of 45% debt and 55% common equity. What is the company's WACC if all the equity used is from retained earnings? Do not round your intermediate calculations.ABC Inc. is expected to pay a $2.50 dividend at year end (D1 = $2.50), the dividend is expected to grow at a constant rate of 5.50% a year, and the common stock currently sells for $52.50 a share. The before-tax cost of debt is 7.50% and the tax rate is 40%. The target capital structure consist of debt and 55% common equity. What is the companys WACC if all the equity used is from retained earnings?
- S Corp. is expected to pay a $2.55 dividend at year end, the dividend is expected to grow at a constant rate of 4.50% a year, and the common stock currently sells for $35 a share. The befoes-tax cost of debt in S and the tax rate is 40%. The target capital structure consists of 60% debt and 40% common equity. What is the company's WACC? Do not round your intermediate calculations. Ⓒa. 8.39% b.9.24 % O c. 6.25 % Od. 6.69% Ⓒ.7.97%Sorensen Systems Inc. is expected to pay a $2.50 dividend at year end (D1 = $2.50), the dividend is expected to grow at a constant rate of 5.50% a year, and the common stock currently sells for $40.00 a share. The before-tax cost of debt is 7.50%, and the tax rate is 40%. The target capital structure consists of 45% debt and 55% common equity. What is the company’s WACC if all the equity used is from retained earnings? Do not round your intermediate calculations. Group of answer choices 8.49% 6.96% 6.79% 6.45% 9.42%A company currently has a bond outstanding that pays 6% coupon rate (coupons paid semiannually), a $1,000 par value and matures in 30 years. The bond is currently trading at $515.16. The company's tax rate is 25%. What is the firm's after-tax component cost of debt for purposes of calculating the weighted average cost of capital ("WACC")? Please show formulas, step by step instructions (without a financial calculator or Excel)
